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2024 (5) TMI 278 - AT - Insolvency and BankruptcyImpleadment of the appellant bank as Proposed 2nd Respondent, in main Company Appeal - necessary/proper party - petitioner having exclusive charge over the Superstructures built by the 1st Respondent / Appellant, on the Land of the Corporate Debtor - HELD THAT - This Tribunal, pertinently points out that the Petitioner / Bank, in its Sanction Letter, dated 30.03.2011, had stated that, it has a Pari Passu Charge, only, on the Superstructures, built on the Land of the Corporate Debtor. Even the Form D, dated 06.08.2022 of the Petitioner / Bank, furnished with the Liquidator, as a Financial Creditor of the Corporate Debtor, unerringly points out that the Petitioner / Bank, does not have a Exclusive Charge, over the Superstructures, built upon the Land of the Corporate Debtor. It cannot be brushed aside that the Asset, subject to such Security Interest, Viz. the subject matter of the present Lis, was already relinquished by the Petitioner / Bank, in to the Liquidation Estate of the Corporate Debtor, by their own admission. To bring a Person as a Party Respondent / Defendant, in a given Legal Proceedings, is not a Substantive Right, but One of Procedure. The instant main Company appeal hovers around the issue of Eviction, of the 1st Respondent / Appellant, from the Land of the Corporate Debtor , even though, the Lease Deed , dated 30.09.2017, which had expired on 30.09.2022, and further that, the Petitioner / Bank, has a Pari Passu Charge , in respect of the Superstructures , built on the Land of the Corporate Debtor , and in any event, the Petitioner / Bank , nor the 1st Respondent / Appellant , cannot place reliance, on the alleged Rental Deed , this Tribunal , comes to an irresistible and inevitable conclusion, that the Petitioner / Bank , is not a Necessary and Proper Party , to get itself Impleaded , in the main Company appeal. Appeal dismissed.
Issues Involved:
1. Impleadment Application by Petitioner/Bank. 2. Eviction of Appellant from the property of Corporate Debtor. Summary: Impleadment Application by Petitioner/Bank: The Petitioner/Bank filed IA No. 199/2024 u/s Rule 11 r/w Rule 31 of NCLAT Rules, 2016, seeking to be impleaded as the Proposed 2nd Respondent in Comp. App (AT) (CH) (INS) No. 13/2024. The Petitioner/Bank argued that it had sanctioned Working Capital Facilities to the 1st Respondent/Appellant and had an exclusive charge over the superstructures built on the land of the Corporate Debtor. The Bank cited various loan security documents and acknowledgments of debt by the borrower. The Petitioner/Bank contended that the 2nd Respondent/Liquidator obtained an order for possession of the property without impleading the Bank, arguing that the Bank is a necessary and proper party. The 1st Respondent/Appellant countered that it had invested in constructing the buildings and had no termination notice u/s 106 of the Transfer of Property Act, 1882. The 2nd Respondent/Liquidator argued that the Bank had only a pari passu charge and had relinquished the asset into the liquidation estate. The Tribunal observed that the Bank's sanction letter and Form D indicated a pari passu charge, not an exclusive charge. The Tribunal concluded that the Bank is not a necessary and proper party for the main appeal concerning the eviction issue. Therefore, IA No. 199/2024 was dismissed. Eviction of Appellant from the Property of Corporate Debtor: The Appellant, M/s. Bhagyanagar Hotels Private Limited, challenged the order dated 04.12.2023 in IA (IBC) No. 265/2023 in CP (IB) No. 651/7/HDB/2018, passed by the NCLT, Hyderabad Bench, directing the Appellant to vacate and handover possession of the property. The Appellant argued that the NCLT lacked jurisdiction to try suits of a civil nature and that the lease had not been terminated as per law. The Appellant claimed it had constructed the buildings and was entitled to stay or be refunded the construction costs. The Respondent/Liquidator contended that the lease had expired, and the Appellant's possession was wrongful. The Tribunal held that the premises were part of the liquidation estate and that the NCLT had jurisdiction over matters related to the insolvency of the Corporate Debtor. The Tribunal found no legal errors in the NCLT's order directing the Appellant to vacate and handover possession and pay arrears of rent. The appeal was dismissed, and the Appellant was directed to vacate and handover the property within one month from the date of the judgment.
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